06/07 Interaction matters in governance

By Huang Shuo

China.org.cn, July 6, 2011

The process by which the government raised the income tax threshold last week marks a new era in policy-making. Authorities opened the proposal to public comments online, assessed people's opinions and tweaked the final resolution to accommodate their views.

Under the original State Council proposal, the government would raise the tax threshold from 2,000 yuan to 3,000 yuan. When it was submitted to the people, 83 percent of respondents said the threshold should be even higher. In the end, the National People's Congress settled on a threshold of 3,500 yuan.

Although the amendment may seem small, the whole process of collecting ideas and suggestions from people showed that the government is ready to respond to public demands. The openness of governance will bring lots of help to the building of a harmonious society. People will obtain many benefits from the amendment. And officials have a chance to realize the Communist Party's governing motto: "The government must function by the mandate of the people, empathize with the feelings of the people, and work for the well-being of the people." With the amendment, the government has made an obvious change in its attitude toward public opinion after a series of mass disturbances since January.

But the tax threshold raise is only a start to solving people's economic woes. It still lags behind increases in consumer prices. According to the National Bureau of Statistics, food prices increased 7.2 percent last year while the share of the national income going to wage earners decreased from 67.2 percent in 1995 to 57.1 percent in 2008. A report released in May by the Central University of Finance and Economics showed that the tax burden in China is heavier than many middle- and upper-income nations. These statistics suggest that authorities should reduce taxes and invest more in fields such as education, poverty reduction and healthcare.

The new income tax threshold is just a beginning for wage earners and social management. An effective mode of communication and interaction between the government and the people has been established in this era of the Internet.

The author is a Beijing-based freelance writer and current affairs commentator. He can be reached at larryhuangshuo@gmail.com.

Opinion articles reflect the views of their authors, not necessarily those of China.org.cn.